Tangherlini Says Federal Triangle South Project Will Increase Efficiency, Save Taxpayer Dollars, and Transform a Core Area of Washington, DC

Remarks as Prepared for Delivery by Dan Tangherlini
U.S. General Services Administration
Investing in Federal Triangle South
National Press Club
December 20, 2012

Ladies and gentlemen, it is an honor to be here with you this morning. Before I go any further, I want to take a moment to thank Ernie Jarvis, Gail Edwards, and everyone from the District of Columbia Building Industry Association for inviting me to speak with you. I also want to thank the National Press Club for having us as their guests.

Today, those of us in public service face a significant problem that is impacting every aspect of our jobs. Spending is outpacing revenue, and it is doing so in a way that we have never seen in our lifetime. That has to change, and as a result, we are seeing budgets across government shrink. All of us need to recognize that this level of constraint is not going away anytime soon. At the same time, the public’s demand for services shows no sign of decreasing-- if anything, it is only growing.

The reduced resources at our disposal have forced agencies throughout the federal government to sit down, examine their expenditures, and question just how many of them are fixed costs. For many agencies, this means taking a look at their space and re-evaluating just how much of it they actually need. When you have to find extra room in the budget and you are responsible for keeping our borders safe or protecting the nation’s food supply, it is natural that an expensive lease would be one of the first places to look to cut costs.

This need to use our space more efficiently, coupled with the transformational effects of technology on our offices, is changing the way we work. As we grapple with increasing demand, we have an opportunity to find innovative ways to deliver not just the same, but even more services. As we do this, we have to find a way to meet that demand without growing, and preferably decreasing, our current federal footprint. The kind of office space that was the manifestation of traditional agency hierarchies is no longer viable. Those outdated spaces need to give way to shared spaces that can accommodate the need for a collaborative, flexible work environment that facilitates cooperation, mobility, and improved productivity. GSA is experimenting with this kind of office space through the renovations that are taking place at our headquarters at 1800 F NW. We are expecting to see the utilization rates of the offices in that building increase from rates of below 50 percent to rates as high as 80 percent. I’m sure that I’ll be back to speak to you about 1800 F in the near future.

As the government’s landlord, this is the challenge that faces GSA today. We have to respond to the needs of agencies with shrinking budgets that are operating in inefficient space that no longer supports the needs of government in the 21st century. They cannot function in outdated facilities that force them to waste valuable funding on space redundancy and energy intensity.

It is these sets of circumstances that bring us to Federal Triangle South. Right now, the buildings that comprise this area represent a significant challenge and opportunity for both GSA and the agencies that occupy them. The Cotton Annex is empty and essentially abandoned. It is a very inefficient use of very valuable space in Washington DC.

The GSA Regional Office Building at 7th and D street SW is also inefficient and unattractive space. On any given day at least 40 percent of staff is not in the building, as they are teleworking or collaborating or meeting off-site with their colleagues or customers. This space was not constructed with the modern realities of a mobile workplace in mind. Its old cubicle farms make it the perfect poster child for everyone’s negative stereotypes about what government offices look like. In fact, originally a warehouse, it is an example of a form of adaptive reuse that has done much to set back that approach to repurposing historic properties.

The Department of Energy Building is another facility that does not accommodate its tenants’ needs for space or facility amenities. Currently this facility uses approximately 6,000 BTUs of energy per square foot more than the industry average. This occurs in a building with 1.8 million square feet of space. That is 10.8 billion BTUs of excess energy. That’s enough energy to power almost 300 average US households for an entire year. There is a certain irony to the Department of Energy working in a building that is that inefficient.

The FAA buildings are in the best shape of any of these facilities, but they too are not equipped for the needs of a 21st century government agency. Last year $20 million was invested into a single floor of the Orville building to bring it up to the standards of a modern-day office. That kind of investment is not sustainable. We have to try something else.

In Federal Triangle South, we have an opportunity to reexamine how the federal government uses these buildings and also reassess how this space fits into the surrounding community. At GSA, we understand that the buildings we manage are not simply places where federal employees work, they are highly visible parts of the neighborhoods where they are located. As we look to address the needs of our partner agencies, we also have important opportunities to contribute to the economic development of the places they call home.

For example in Washington DC, GSA has been proud to be a part of projects that have contributed to the transformed neighborhoods around them. The ATF building has helped to support the transformation of the NoMA neighborhood, which now houses 40,000 workers a day and is home to 200,000 square feet of retail, two hotels, and 2,700 residential units. The new US Department of Transportation building was a vital catalyst of the transformation of the Southeast Waterfront. This area is now one of the most rapidly growing areas of DC, with Nationals Park, more than 35,000 daytime employees, and 3,800 people who call that area home.

As these examples show, what we build and where we build it can have a huge impact on the neighborhoods around it. That is why when we look at how we can best utilize Federal Triangle South we have to consider that this could be a once-in-several-lifetimes opportunity to re-imagine this part of Washington DC. Can anyone here think of how long it has been since there was any property for sale on this part of Independence Avenue? Based on the ambitious and visionary proposal put forward by the National Capital Planning Commission in its Southwest Ecodistrict, Federal Triangle South is a chance for GSA to kick start the same kind of transformation that we saw at NoMA and the Southeast Waterfront.

Working together with industry, we believe that we can redevelop the underutilized and outdated properties at Federal Triangle South to create a mixed-use neighborhood that will connect the National Mall to the Southwest Waterfront. We believe we can both provide for the 21st Century space needs of Federal employees and create a place in which people will want to work, live, play, and learn. We can replace the cold, sterile, utilitarian, single use enclave with a vibrant, diverse, and special community of its own.

As you know, GSA issued an RFI asking industry for ideas about how we can best utilize the buildings in this area to transform this community. We want to hear your input and your ideas. These buildings represent valuable assets for GSA and the government, and given that they have an estimated more than two million square feet of unused developable space, we are not utilizing them to their fullest potential. We are hoping that you will help us unlock this stored value and unleash an exciting transformation.

GSA is committed to addressing the challenge offered by both President Obama and Congress to make the entire government more efficient. This means changing the way our buildings work, but it also means shrinking the federal footprint and creating more sustainable space. The current fiscal stress means that we simply cannot afford to do business as usual. We must look for new ways to maximize the value of our assets. Public/private partnerships like the ones we are hoping to create in Federal Triangle South represent a new approach that will benefit Washington DC and communities across the country. And our interest in this approach is not limited to this project.

Last week, when we issued the RFI for Federal Triangle South, we also included one for the J. Edgar Hoover building, offering to exchange that facility for the construction of a new headquarters that meets the needs of the FBI today. We are looking into a similar exchange for the outdated and historic Spring Street Courthouse in Los Angeles and working with the development community in Miami to understand the best options for the possible development and use of the now vacant David W. Dyer Federal Building in Miami. If we cannot use these spaces anymore, we should work with those who can. For example, just yesterday I announced that we would take the West Heating Plant in Georgetown to auction in January.

We know that the federal government owns some valuable assets, and we are looking to see if we can tap into that value to create not just high quality and high efficiency space for public servants, but real, lasting contributions to the neighborhoods where we work and live.
A property like Federal Triangle South represents a huge opportunity for this city. Working together, as partners, we not only have a chance to shape a better, more efficient government for the 21st century, but also fuel the transformation of a core area of Washington DC. I look forward to engaging you in an ongoing dialogue to hear your thoughts and ideas on how we can make this happen. Thank you.